Blog Post

Questions and Answers | Smart Home Series

Luisa Hough • Mar 16, 2016

Welcome to the third and final post in a series about smart homes and technology. In case you want to start at the beginning, you can find the introduction here , while we went room to room in the second post. Now, this post WAS going to focus on new gadgets, fresh off the innovation press, and ready to be installed into any and all smart homes. However, we’ve decided against this topic for a couple of reasons: Firstly, we understand that for the vast majority of people, smart home technology is still a new entity filled with unexplored nooks and crannies. Because of this, the idea of showcasing new gadgets, released in the first part of 2016, seemed somewhat redundant (mainly because everything is new). And while we understand that there remains a niche group that would (and does) enjoy this sort of technological update, in thinking about the general populous, we decided to go in a different direction. Secondly, we understand that any list we could put together couldn’t and wouldn’t hold a candle to some of the intensive lists that already dot the internet landscape. Our offering would be a mere pittance in comparison. So instead we decided to include a link below. But consider this your fair warning, if you click the image below and take a journey over to thegadgetflow.com you might not ever come back. You thought Facebook was bad for rabbit trails, nope… the gadgetflow will have you back here looking to refinance your mortgage to make some of these wild smart home upgrades. You have been warned. thegadgetflow-1 Are you still here? Okay good! So, this post will be for you: the homeowner (or the future homeowner). The goal is to lead you through some of the decision making processes when it comes to smart home technology. *“Is now the time to jump in with both feet?” *“If so, how much should I invest?” *“What are the ‘must haves’ versus that which can wait?” These are the questions that we want to entertain for the next few minutes.

“Is NOW the time to jump in with both feet?”

manclock-1Five years ago, we would have had a different answer for you as it relates to upgrading your home with smart technology; a more tentative response. Why? Common sense dictates that you wait for the market to catch up to the technology. The first few buyers will, without fail, pay more than the masses who choose to wait and buy at a later date. Additionally, it’s prudent to wait in order to make sure the technology is failsafe. But with the recent advancements in smart home technology, it would seem as though now is as good a time as any with which to “buy in”. And while the technology is still quite new, it isn’t hot off the press, and so the price point in 2016, while high, is not as high as it has been. In other words, the water’s warm; it’s safe to jump in… as long as you’re OK getting wet.

“How much should I invest?”

piggybank-1This question is completely dependent on the individual. Smart home “starter packs” can be as inexpensive as a few hundred dollars, while other (wealthy) individuals opt for the complete home renovation package; top to bottom hardwired changes. The former certainly won’t break the bank, and the latter will cost anywhere from a few thousand dollars to infinity (and beyond). As is with anything, understand where you sit financially, understand where your greatest need lies, and spend your money accordingly.

“What are the ‘Must Haves’?”

wantneed-1Home automation technology can be broken down into two sub groups. The first sub-group is safety & security and the second sub-group is leisure (now, obviously there’s a large gray area for lots of products that fit both of these sub-groups, however…) We suggest starting with safety & security. Invest in keeping your family safe. Upgrade your locks and outdoor sensors. Upgrade your garage door opener and security system features. Upgrade your lighting system and appliances. Resist the urge to live in constant fear of the outside world, but be prepared. Start at this point and move out from there. There will be plenty of time for leisure after your family is well taken care of. This series has only just begun to uncover the vast world of smart home technology. It’s a huge field with lots of growth potential and unlimited appeal. We hope you’ve gained a certain appreciation for this type of technology, and we hope you’ve had some fun doing it, as well. And, as is always the case, for any and all of your mortgage needs, contact me anytime, I’m here to help.

Recent Posts

By Luisa Hough 27 Mar, 2024
If you’re new to the home buying process, it’s easy to get confused by some of the terms used. The purpose of this article is to clear up any confusion between the deposit and downpayment. What is a deposit? The deposit is the money included with a purchase contract as a sign of good faith when you offer to purchase a property. It’s the “consideration” that helps make up the contract and binds you to the agreement. Typically, you include a certified cheque or a bank draft that your real estate brokerage holds while negotiations are finalized when you offer to purchase a property. If your offer is accepted, your deposit is held in your Realtor’s trust account. If your offer is accepted and you commit to buying the property, your deposit is transferred to the lawyer’s trust account and included in your downpayment. If you aren’t able to reach an agreement, the deposit is refunded to you. However, if you commit to buying the property and don’t complete the transaction, your deposit could be forfeit to the seller. Your deposit goes ahead of the downpayment but makes up part of the downpayment. The amount you put forward as a deposit when negotiating the terms of a purchase contract is arbitrary, meaning there is no predefined or standard amount. Instead, it’s best to discuss this with your real estate professional as your deposit can be a negotiating factor in and of itself. A larger deposit may give you a better chance of having your offer accepted in a competitive situation. It also puts you on the hook for more if something changes down the line and you cannot complete the purchase. What is a downpayment? Your downpayment refers to the initial payment you make when buying a property through mortgage financing. In Canada, the minimum downpayment amount is 5%, as lenders can only lend up to 95% of the property’s value. Securing mortgage financing with anything less than 20% down is only made possible through mortgage default insurance. You can source your downpayment from your resources, the sale of a property, an RRSP, a gift from a family member, or borrowed funds. Example scenario Let’s say that you are looking to purchase a property worth $400k. You’re planning on making a downpayment of 10% or $40k. When you make the initial offer to buy the property, you put forward $10k as a deposit your real estate brokerage holds in their trust account. If everything checks out with the home inspection and you’re satisfied with financing, you can remove all conditions. Your $10k deposit is transferred to the lawyer’s trust account, where will add the remaining $30k for the downpayment. With your $40k downpayment made, once you sign the mortgage documents and cover the legal and closing costs, the lender will forward the remaining 90% in the form of a mortgage registered to your title, and you have officially purchased the property! If you have any questions about the difference between the deposit and the downpayment or any other mortgage terms, please connect anytime. It would be a pleasure to work with you.
By Luisa Hough 20 Mar, 2024
If you’ve been thinking about selling your existing property, for whatever reason, it would be in your best interest to connect with an independent mortgage professional before calling your real estate agent or listing it yourself. And while talking with your mortgage professional might not sound like the most logical place to start, here are a few scenarios that explain why it makes the most sense. If you’re buying a new property If you’re selling your property, chances are, you’ll have to move somewhere! So, if you plan on buying a new property using the equity from the sale of your existing property, chances are you’ll need a new mortgage. Don’t assume that just because you’ve secured mortgage financing before, that you’ll qualify again. Mortgage rules are constantly changing; make sure you have a pre-approval in place before you list your property. Also, by connecting with a mortgage professional first, you can look into your existing mortgage terms. You might be able to port your mortgage instead of getting a new one, which could save you some money. If you’re not buying a new property Even if you aren’t buying a new property and want to sell your existing property, it’s still a good idea to connect with a mortgage professional first, as we can look at the cost of breaking your mortgage together. Unless you have an open mortgage, or a line of credit, there will be a penalty to break your mortgage. The goal is to work on a plan to minimize your penalty. Because of how mortgage penalties work, sometimes it’s just a matter of waiting a few months to save thousands. You'll never know unless you take a look at the details. Marital breakdown The simple truth is that marriages break down. When that happens, often, people want closure, and unfortunately, they make decisions without really thinking them through or seeing the full picture. So, instead of simply selling the family home because that feels like the only option, please know that special programs exist that allow one party to buy out the former spouse. The key here is to have a legal separation agreement is in place. If you’d like to discuss the sale of your property and your plans for the future, connect anytime. It would be a pleasure to work with you!
By Luisa Hough 13 Mar, 2024
Your downpayment refers to the initial payment you make when buying a property through mortgage financing. A downpayment is always required when purchasing, because in Canada, lenders are only allowed to lend up to 95% of the property value, leaving you with the need to come up with at least 5% for a downpayment. In fact, securing mortgage financing with anything less than 20% down is only made possible through mortgage default insurance. Canada has three default insurance providers: the Canadian Mortgage and Housing Corporation (CMHC), Sagen (formerly Genworth Canada), and Canada Guaranty. There is a cost for default insurance which is usually rolled into the total mortgage amount and is tiered depending on how much you put down. As your downpayment can be a significant amount of money, you probably need a plan to put this money together. So, let’s take a look at some of the options you have to come up with a downpayment. Money from your resources If you’ve been saving money and have accumulated the funds and set them aside for to use for your downpayment, you'll need to prove a 90-day history of those funds. As far as the lender is concerned, this is the most straightforward way to prove a downpayment. Any large deposits to your bank account that aren’t from payroll will require you to prove the source of funds. For example, if you recently sold a vehicle, you’ll need to provide the paperwork as proof of ownership, which corresponds to your account’s deposit. Or, if you have funds in an investment account that you’ve transferred over, statements of that transfer or account would suffice. You have to prove the source of your downpayment funds to the lender when qualifying for a mortgage to help prevent money laundering. Funds from the sale of another property If you’ve recently sold a property and you’re using the proceeds of that sale as the downpayment from your new purchase, you can provide the paperwork from that transaction to substantiate your downpayment. RRSPs through the Home Buyer’s Plan Okay, so let’s say you don’t have all the money set aside in your savings, but you do have cash in your RRSP. Assuming you’re a first-time homebuyer, you can access the funds from your RRSP Tax-Free to use as a downpayment. You’re able to access up to $35k individually or $70k as a couple. The money has to be paid back over the next 15 years. If you’d like more information on what this program looks like, please get in touch. Gifted downpayment Now, if you don’t have enough money in your savings, but you have a family member who is willing to help, they can gift you funds for your downpayment. With the increased cost of living, making it harder to save for a downpayment, receiving a gift from a family member is becoming increasingly commonplace. Now, to qualify, the gift has to come from an immediate family member who will sign a gift letter indicating there is no schedule of repayment and that the gift doesn’t have to be repaid. Proof that the money has been deposited into your account is required through bank statements. Gifted funds can make up part of or the entire amount of downpayment. For example, if you purchase a property for $300k and have $10k saved up, your parents can gift you the remaining $5k to make up the total 5% downpayment. Borrowed downpayment Suppose you aren’t fortunate enough to have a family member who can gift you a downpayment, but you have excellent credit and a high income compared to the amount you’re looking to borrow. In that case, you might qualify to borrow part or all of your downpayment. It’s possible to borrow your downpayment as long as you include the payments in your debt service ratios. Typically this is 3% of the outstanding balance. So there you have it, to qualify for a mortgage, you’ll need to come up with a downpayment. That can be through your resources, a property you sold, an RRSP, a gift from a family member, borrowed funds, or a combination of all five sources. If you’d like to discuss your downpayment or anything else related to mortgage financing; it’s never too early to start the conversation about getting pre-approved for a mortgage. Please connect anytime. It would be a pleasure to work with you!

Contact Me Anytime!

The best way to get ahold of me is to submit through the contact form below. However feel free to give me a shout on the phone as well.

Contact Us

Share by: